spsc-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: March 31, 2026


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ________ to ________

Commission file number 001-34702

SPS COMMERCE, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware			41-2015127
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

333 South Seventh Street, Suite 1000, Minneapolis, MN 55402

(Address of principal executive offices, including Zip Code)

(612) 435-9400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock, par value $0.001 per share

SPSC

The Nasdaq Stock Market LLC (Nasdaq Global Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated Filer	o

Non-accelerated filer	o	Smaller reporting company	o

		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding at April 23, 2026 was 36,712,702 shares.

Table of Contents

SPS COMMERCE, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Comprehensive Income	4

	Condensed Consolidated Statements of Stockholders’ Equity	5

	Condensed Consolidated Statements of Cash Flows	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4.	Controls and Procedures	26

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	28

Item 6.	Exhibits	28

SIGNATURES		29

Unless the context otherwise requires, for purposes of the Quarterly Report on Form 10-Q, the words “we,” “us,” “our,” the “Company,” “SPS,” and “SPS Commerce” refer to SPS Commerce, Inc.


SPS COMMERCE, INC.			2			Form 10-Q for the Quarterly Period ended March 31, 2026

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PART I. – FINANCIAL INFORMATION

Item 1. Financial Statements

SPS COMMERCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands, except shares)	March 31, 2026		December 31, 2025
ASSETS	(unaudited)
Current assets
Cash and cash equivalents	$	154,271	$	151,355

Accounts receivable	72,003		75,295
Allowance for credit losses	(6,897)		(7,129)
Accounts receivable, net	65,106		68,166
Deferred costs	65,906		66,693
Other assets	43,457		49,090
Total current assets	328,740		335,304
Property and equipment, net	46,154		43,117
Operating lease right-of-use assets	4,856		5,025
Goodwill	540,836		541,719
Intangible assets, net	206,069		215,815
Other assets
Deferred costs, non-current	20,294		20,719
Deferred income tax assets	511		493
Other assets, non-current	13,748		7,667
Total assets	$	1,161,208	$	1,169,859
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	14,468	$	13,757
Accrued compensation	42,647		47,577
Accrued expenses	15,535		13,074
Deferred revenue	80,382		75,590
Operating lease liabilities	1,918		4,353
Total current liabilities	154,950		154,351
Other liabilities
Deferred revenue, non-current	5,318		5,288
Operating lease liabilities, non-current	4,700		2,839
Deferred income tax liabilities	33,801		33,201
Other liabilities, non-current	279		287
Total liabilities	199,048		195,966
Commitments and contingencies (Note I)
Stockholders' equity
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, $0.001 par value; 110,000,000 shares authorized; 40,240,558 and 40,048,410 shares issued; and 36,948,282 and 37,517,239 shares outstanding, respectively	40		40
Treasury stock, at cost; 3,292,276 and 2,531,171 shares, respectively	(226,903)		(177,949)
Additional paid-in capital	741,544		722,737
Retained earnings	449,167		429,438
Accumulated other comprehensive loss	(1,688)		(373)
Total stockholders’ equity	962,160		973,893
Total liabilities and stockholders’ equity	$	1,161,208	$	1,169,859

See accompanying notes to these condensed consolidated financial statements.


SPS COMMERCE, INC.			3			Form 10-Q for the Quarterly Period ended March 31, 2026

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SPS COMMERCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended March 31,
(in thousands, except per share amounts) (unaudited)	2026		2025
Revenues	$	192,121	$	181,549
Cost of revenues	59,217		56,914
Gross profit	132,904		124,635
Operating expenses
Sales and marketing	44,734		41,634
Research and development	17,917		17,439
General and administrative	36,374		31,018
Amortization of intangible assets	9,320		8,588
Total operating expenses	108,345		98,679
Income from operations	24,559		25,956
Other income, net	1,405		2,207
Income before income taxes	25,964		28,163
Income tax expense	6,235		5,967
Net income	$	19,729	$	22,196

Other comprehensive income (expense)
Foreign currency translation adjustments	(1,315)		2,227
Comprehensive income	$	18,414	$	24,423

Net income per share
Basic	$	0.53	$	0.58
Diluted	$	0.53	$	0.58

Weighted average common shares used to compute net income per share
Basic	37,379		37,990
Diluted	37,442		38,163

See accompanying notes to these condensed consolidated financial statements.


SPS COMMERCE, INC.			4			Form 10-Q for the Quarterly Period ended March 31, 2026

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SPS COMMERCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(in thousands, except shares) (unaudited)	Shares	Amount		Shares	Amount
Balances, December 31, 2024	37,661,308	$	40	1,928,968	$	(99,748)	$	627,982	$	336,099	$	(9,683)	$	854,690
Stock-based compensation	—	—		—	—		13,138		—		—		13,138
Shares issued pursuant to stock awards	240,190	—		—	—		635		—		—		635
Employee stock purchase plan activity	2,630	—		—	—		411		—		—		411
Repurchases of common stock, net of costs	(281,001)	—		281,001	(40,000)		—		—		—		(40,000)
Reissuances of treasury stock	378,100	—		(378,100)	37,652		29,972		—		—		67,624
Net income	—	—		—	—		—		22,196		—		22,196
Foreign currency translation adjustments	—	—		—	—		—		—		2,227		2,227
Balances, March 31, 2025	38,001,227	$	40	1,831,869	$	(102,096)	$	672,138	$	358,295	$	(7,456)	$	920,921

Balances, December 31, 2025	37,517,239	$	40	2,531,171	$	(177,949)	$	722,737	$	429,438	$	(373)	$	973,893
Stock-based compensation	—	—		—	—		17,307		—		—		17,307
Shares issued pursuant to stock awards	185,353	—		—	—		980		—		—		980
Employee stock purchase plan activity	6,795	—		—	—		520		—		—		520
Shares withheld for net share settlement	(3,384)	—		3,384	(319)		—		—		—		(319)
Repurchases of common stock, net of costs	(757,721)	—		757,721	(48,635)		—		—		—		(48,635)
Net income	—	—		—	—		—		19,729		—		19,729
Foreign currency translation adjustments	—	—		—	—		—		—		(1,315)		(1,315)


Balances, March 31, 2026	36,948,282	$	40	3,292,276	$	(226,903)	$	741,544	$	449,167	$	(1,688)	$	962,160


SPS COMMERCE, INC.			5			Form 10-Q for the Quarterly Period ended March 31, 2026

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SPS COMMERCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
(in thousands) (unaudited)	2026		2025
Cash flows from operating activities
Net income	$	19,729	$	22,196
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes	713		(4,418)
Depreciation and amortization of property and equipment	5,834		4,957
Amortization of intangible assets	9,320		8,588
Provision for credit losses	1,973		1,822
Stock-based compensation	18,073		13,867
Other, net	(242)		168
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable	1,103		(7,443)
Deferred costs	1,265		(1,247)
Other assets and liabilities	(715)		1,174
Accounts payable	(792)		1,677
Accrued compensation	(5,988)		(7,948)
Accrued expenses	893		3,868
Deferred revenue	4,873		3,160
Operating leases	(410)		(438)
Net cash provided by operating activities	55,629		39,983
Cash flows from investing activities
Purchases of property and equipment	(7,140)		(6,150)
Acquisition of business, net	—		(141,636)
Net cash used in investing activities	(7,140)		(147,786)
Cash flows from financing activities
Repurchases of common stock	(47,124)		(40,000)
Net proceeds from exercise of options to purchase common stock	743		635
Net proceeds from employee stock purchase plan activity	520		411

Net cash used in financing activities	(45,861)		(38,954)
Effect of foreign currency exchange rate changes	288		661
Net increase (decrease) in cash and cash equivalents	2,916		(146,096)
Cash and cash equivalents at beginning of period	151,355		241,017
Cash and cash equivalents at end of period	$	154,271	$	94,921

See accompanying notes to these condensed consolidated financial statements.


SPS COMMERCE, INC.			6			Form 10-Q for the Quarterly Period ended March 31, 2026

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SPS COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE A – General

Business Description

SPS Commerce is a global supply chain network that connects retailers, brands, distributors, manufacturers, and logistics providers through shared infrastructure built to handle the complexity of modern commerce operations. Our network enables companies to connect once and immediately transact with thousands of trading partners without negotiating standards, building integrations, or maintaining compliance logic.

Our network powers our portfolio of solutions that orchestrate the critical processes, protocols, and data exchanges needed to get the right product, in the right place, at the right time, every time. We have embedded deep expertise, proven processes, and compliance logic built from over 20 years of commerce intelligence into every connection, delivering a full-service experience that empowers partners to move forward faster, together.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.

This interim financial information has been prepared under the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”). We have included all normal recurring adjustments considered necessary to provide a fair presentation of our financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. Operating results for these interim periods are not necessarily indicative of the results to be expected for the full year.

Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Significant Accounting Policies

There were no material changes in our significant accounting policies, nor were there differences in the basis of our segmentation, during the three months ended March 31, 2026. See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC.


SPS COMMERCE, INC.			7			Form 10-Q for the Quarterly Period ended March 31, 2026

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Accounting Pronouncements Recently Adopted

Standard

Date of Issuance

Description

Date of Adoption

Effect on the Financial Statements

ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets

July 2025

This amendment allows for entities to elect a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

2026

Upon adoption, the Company elected not to apply the current conditions practical expedient. The adoption did not have a material impact on our financial statements and related disclosures.

Accounting Pronouncements Not Yet Adopted

Standard

Date of Issuance

Description

Year of Required Adoption

Effect on the Financial Statements

ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)

November 2024

This amendment requires that an entity disclose in its notes to financial statements specified information about certain costs and expenses.

2027

We are currently evaluating the adoption on our financial statements and anticipate the impact will result in additional disclosure.

ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)

September 2025

This amendment modernizes the accounting for software costs under Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software by removing all references to software development project stages. The amendment requires an entity to begin capitalizing software costs when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

2028

We are currently evaluating the adoption on our financial statements and related disclosures.

ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvement

December 2025

The amendments in this update result in a comprehensive list of interim disclosures that are required by GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements.

2028

We are currently evaluating the adoption on our interim financial statements and related disclosures.

NOTE B – Business Acquisitions

Carbon6 Technologies, Inc.

On December 30, 2024, we entered into a definitive agreement to acquire all of the outstanding equity ownership interests of Carbon6 Technologies, Inc. ("Carbon6"), a provider of software tools to Amazon sellers, including specialized offerings for revenue recovery for both first-party ("1P") and third-party ("3P") suppliers. The acquisition became effective on February 4, 2025 ("Close"). Pursuant to the definitive agreement, the total consideration transferred was $210.2 million, net of cash acquired. The consideration was comprised of $142.5 million paid in cash, net of cash acquired, and 378,100 shares of SPS common stock (valued at $67.7 million, determined at acquisition Close based on the price of SPS common stock). The shares were issued from SPS treasury shares. The purchase accounting for the acquisition is final. The goodwill associated with the acquisition is not deductible for income tax purposes.


SPS COMMERCE, INC.			8			Form 10-Q for the Quarterly Period ended March 31, 2026

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Unaudited pro forma information has not been disclosed for the Carbon6 acquisition as it was not considered material to our condensed consolidated financial statements.

Purchase Price Allocations

We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.

The following table presents the purchase consideration and estimated fair values of acquired assets and liabilities recorded in the Company's condensed consolidated balance sheet as of the acquisition date:


(in thousands)	Carbon6
Cash paid	$	144,855
Equity consideration	67,672
Total consideration	$	212,527

Estimated fair value of assets and liabilities acquired:
Cash	2,306
Accounts receivable	5,868
Other assets, current and non-current	8,695
Intangible assets
Customer relationships	44,535
Developed technology	29,370
Deferred revenue	(604)
Other liabilities, current and non-current	(10,162)
Deferred income tax liabilities, net	(3,753)
Total fair value of assets and liabilities acquired	$	76,255

Goodwill	$	136,272

The following table summarizes the estimated useful lives for each acquired intangible asset:


			Carbon6
Customer relationships			8.0 years
Developed technology			9.0 years

NOTE C – Revenue

Revenue by Product Type

We derive our revenues from the following revenue streams:


	Three Months Ended March 31,
(in thousands)	2026		2025
Recurring revenues:
Fulfillment	$	164,309	$	152,631
Analytics	14,132		13,702
Other	6,079		5,996
Recurring revenues	184,520		172,329
One-time revenues	7,601		9,220
Total revenue	$	192,121	$	181,549


SPS COMMERCE, INC.			9			Form 10-Q for the Quarterly Period ended March 31, 2026

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Revenue by Geographic Area

Domestic revenue, which we define as revenue that was attributable to customers based within the United States ("U.S."), was as follows:


	Three Months Ended March 31,
	2026		2025
Domestic revenue	83	%	85	%

No single jurisdiction outside of the U.S. had revenues in excess of 10%.

Recurring Revenues

We define recurring revenue as active contracts during the reporting period under which the customer regularly pays us fees for subscription-based and reoccurring services. All components of the contracts that are not expected to recur (primarily set-ups and professional services) are excluded from recurring revenue.

Revenue for subscription-based services is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our contracts primarily range from monthly to annual and generally allow the customer to cancel the contract for any reason with 30 to 90 days’ notice. Timing of billings varies by customer and by contract type and are either in advance or within 30 days of the service being performed.

Given that the recurring revenue contracts are generally for one year or less, we have applied the optional exemption to not disclose information about the remaining performance obligations for recurring revenue contracts.

One-time Revenues

One-time revenues consist of set-up fees and miscellaneous fees from customers.

Set-up revenues

Set-up fees, a component of our revenue, are specific for each connection a customer has with a trading partner. These nonrefundable fees are necessary for our customers to utilize our services and do not provide any standalone value. Many of our customers have connections with numerous trading partners.

Set-up fees constitute a material renewal option right that provide customers a significant future incentive that would not be otherwise available to that customer unless they entered into the contract, as the set-up fees will not be incurred again upon contract renewal. As such, set-up fees and related costs are deferred and recognized ratably, generally over two years, which is the estimated period for which a material right is present for our customers.

The table below presents the activity of the portion of the deferred revenue liability relating to set-up fees. We expect to recognize $10.5 million of the balance as of March 31, 2026 as revenue over the next 12 months with the remaining amount recognized thereafter.


	Three Months Ended March 31,
(in thousands)	2026		2025
Balance, beginning of period	$	14,625	$	16,735
Invoiced set-up fees	3,658		3,407
Recognized set-up fees	(3,857)		(4,446)
Balance, end of period	$	14,426	$	15,696

Miscellaneous one-time revenues

Miscellaneous one-time fees primarily consist of professional services and testing and certification.

The contract period for these one-time fees is one year or less and recognized at the time service is provided. We have applied the optional exemption to not disclose information about the remaining performance obligations for miscellaneous one-time fee contracts since they have original durations of one year or less.


SPS COMMERCE, INC.			10			Form 10-Q for the Quarterly Period ended March 31, 2026

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Deferred Revenue

We recognized revenue of $43.6 million and $42.8 million in the three months ended March 31, 2026 and 2025, respectively, from amounts included in deferred revenue at the beginning of the period.

NOTE D – Deferred Costs

The deferred costs activity was as follows:


	Three Months Ended March 31,
(in thousands)	2026		2025
Balance, beginning of period	$	87,412	$	85,914
Incurred deferred costs	21,510		28,618
Amortized deferred costs	(22,722)		(26,009)
Balance, end of period	$	86,200	$	88,523

NOTE E – Fair Value Measurements

Cash equivalents, as measured at fair value on a recurring basis, consisted of the following:


		March 31, 2026						December 31, 2025
	Fair Value Level	Amortized Cost		Unrealized Gains (Losses), net		Fair Value		Amortized Cost		Unrealized Gains (Losses), net		Fair Value
(in thousands)
Cash equivalents:
Money market funds	Level 1	$	108,789	$	—	$	108,789	$	117,685	$	—	$	117,685

NOTE F – Allowance for Credit Losses

The allowance for credit losses activity, included in accounts receivable, net, was as follows:


	Three Months Ended March 31,
(in thousands)	2026		2025
Balance, beginning of period	$	7,129	$	4,179
Provision for credit losses	1,973		1,822
Write-offs, net of recoveries	(2,205)		(1,208)
Balance, end of period	$	6,897	$	4,793


SPS COMMERCE, INC.			11			Form 10-Q for the Quarterly Period ended March 31, 2026

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NOTE G – Property and Equipment, Net

Property and equipment, net consisted of the following:


(in thousands)	March 31, 2026		December 31, 2025
Internally developed software	$	100,277	$	94,859
Computer equipment	27,336		25,462
Leasehold improvements	16,086		15,044
Office equipment and furniture	9,569		9,159
Property and equipment, cost	153,268		144,524
Less: accumulated depreciation and amortization	(107,114)		(101,407)
Total property and equipment, net	$	46,154	$	43,117

Property and equipment, net located outside of the U.S. was as follows:


	March 31, 2026		December 31, 2025
International property and equipment	27	%	26	%

NOTE H – Goodwill and Intangible Assets, Net

Goodwill

The activity in goodwill was as follows:


(in thousands)	Three Months Ended March 31, 2026
Balance, beginning of period	$	541,719
Foreign currency translation	(883)
Balance, end of period	$	540,836

Intangible Assets

Intangible assets, net consisted of the following:


	March 31, 2026
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Customer relationships	$	217,661	$	(77,207)	$	(302)	$	140,152	6.4 years
Developed technology	106,949		(40,907)		(125)		65,917		5.9 years
	$	324,610	$	(118,114)	$	(427)	$	206,069	6.2 years


	December 31, 2025
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net		Weighted Average Remaining Amortization Period
Customer relationships	$	214,451	$	(70,050)	$	2,019	$	146,420	6.6 years
Developed technology	105,599		(37,198)		994		69,395		6.1 years
	$	320,050	$	(107,248)	$	3,013	$	215,815	6.4 years


SPS COMMERCE, INC.			12			Form 10-Q for the Quarterly Period ended March 31, 2026

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The estimated future annual amortization expense related to intangible assets is as follows:


(in thousands)
Remainder of 2026	$	28,095
2027	36,885
2028	35,558
2029	29,110
2030	26,904
Thereafter	49,517
Total future amortization	$	206,069

NOTE I – Commitments and Contingencies

Leases

Effective October 1, 2025, we executed the sixth amendment to our lease agreement (the "Amendment") for our current headquarters located in Minneapolis, Minnesota where we lease approximately 198,000 square feet. The Amendment extends the lease term to end in July 2043 and provides approximately $33 million of lease incentives, which were included in the initial measurement of the operating lease right-of-use asset. The Company expects to utilize approximately $18 million of these lease incentives during the year ending December 31, 2027, with the remaining balance to be utilized thereafter.

The components of lease expense were as follows:


	Three Months Ended March 31,
(in thousands)	2026		2025
Operating lease cost	$	764	$	921
Variable lease cost	895		882
	$	1,659	$	1,803

Supplemental cash flow information related to leases was as follows:


	Three Months Ended March 31,
(in thousands)	2026		2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	1,237	$	1,457
Right-of-use assets obtained in exchange for operating lease liabilities	752		1,094

Supplemental balance sheet information related to operating leases was as follows:


	March 31, 2026		December 31, 2025
Weighted-average remaining lease term	11.7 years		11.0 years
Weighted-average discount rate	6.0	%	6.0	%


SPS COMMERCE, INC.			13			Form 10-Q for the Quarterly Period ended March 31, 2026

Table of Contents

Future minimum lease payments under operating leases are presented net of lease incentives deemed payable at lease commencement. At March 31, 2026, our future minimum payments under operating leases were as follows:


(in thousands)
Remainder of 2026	3,372
2027	(16,648)
2028	1,329
2029	2,884
2030	2,932
Thereafter	30,161
Total future gross payments	24,030
Less: imputed interest	(17,412)
Total operating lease liabilities	$	6,618

Purchase Commitments

We have entered into separate noncancelable agreements with computing infrastructure, productivity software, customer relationship management, and performance and security data analytics vendors for services through 2030. At March 31, 2026, our remaining purchase commitments and estimated purchase timing were as follows:


(in thousands)
Remainder of 2026	6,368
2027	3,472
2028	2,258
2029	1,318
2030	86
Total estimated future purchases	$	13,502

NOTE J – Stockholders’ Equity

Share Repurchase Programs

Our Board of Directors has authorized multiple non-concurrent programs to repurchase our common stock. On February 10, 2026 (announced February 12, 2026), our Board of Directors approved an additional $200.0 million in repurchase authority under our previously announced share repurchase program ("2025 Program") that was approved on October 29, 2025 to repurchase up to $100.0 million of our common stock, excluding costs to obtain, for a total authorized repurchase amount of $300.0 million. Under the program, purchases may be made from time to time in the open market or in privately negotiated purchases, or both. The share repurchase program became effective December 1, 2025 and expires on December 1, 2027.

Details of the programs and activity thereunder through March 31, 2026 were as follows:

(in thousands)

Effective Date

Expiration Date

Share Value Authorized for Repurchase

Share Value Repurchased

Unused & Expired Share Repurchase Value

Share Value Available for Future Repurchase

2024 Program

August 2024

July 2026

100,000

99,990

N/A

2025 Program

December 2025

December 2027

300,000

63,620

N/A

236,380


SPS COMMERCE, INC.			14			Form 10-Q for the Quarterly Period ended March 31, 2026

Table of Contents

Share repurchases are accounted for as the trade date occurs and are reflected in the condensed consolidated financial statements net of the costs incurred to acquire the shares. Share repurchases that have not yet settled in cash are included in accounts payable in the condensed consolidated balance sheet.

The share repurchase activity by period was as follows:


	Three Months Ended March 31,
(in thousands, except shares and per share amounts)	2026		2025
Number of shares repurchased	757,721		281,001
Total share repurchased cost	$	48,635	$	40,000
Average total cost per repurchased share	$	64.19	$	142.35

Treasury Stock Reissuance

In connection with the acquisition of Carbon6 the Company re-issued treasury shares as part of the purchase consideration (see Note B – Business Acquisitions for further information).

NOTE K – Stock-Based Compensation

Our equity compensation plans include grants of incentive and nonqualified stock options, performance share units (“PSUs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and deferred stock units (“DSUs”), to employees, executive officers, and non-employee directors. We also provide an employee stock purchase plan (“ESPP”) and 401(k) match to eligible participants. At March 31, 2026, there were 10.8 million shares available for grant under approved equity compensation plans.

Stock-based compensation expense was allocated in the condensed consolidated statements of comprehensive income as follows:


	Three Months Ended March 31,
(in thousands)	2026		2025
Cost of revenues	$	3,156	$	3,111
Operating expenses
Sales and marketing	4,260		2,427
Research and development	2,265		2,017
General and administrative	8,392		6,312
	$	18,073	$	13,867

Stock-based compensation expense by grant type or plan was as follows:


	Three Months Ended March 31,
(in thousands)	2026		2025
Stock options	$	491	$	549
PSUs	4,534		3,007
RSUs & DSUs	11,426		8,633
RSAs	—		113
ESPP	825		836
401(k) stock match	797		729
	$	18,073	$	13,867

As of March 31, 2026, there was $117.0 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a primarily straight-line basis over a weighted average period of 2.7 years.

SEC Form 10-Q filed by SPS Commerce Inc.